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Authors: Murray N. Rothbard

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France too undertook active explorations in the New World. In 1524 the Florentine captain Giovanni da Verrazano explored virtually the entire east coast of North America. A decade later Jacques Cartier sailed to Newfoundland (1534). A second voyage found him exploring the Gulf of St. Lawrence and the St. Lawrence River (1535–36), which he thought
would lead to China. A dubious tradition says he named the falls at Montreal, La Chine, a bitter gesture indicative of his failure to reach China. A colony was established temporarily by Cartier near Quebec in 1541–42, but the Spaniards were the only ones to establish important settlements in the New World in the first half of the sixteenth century.

The pattern of Spanish colonization was based upon conditions in Spain in the late Middle Ages. In contrast to Europe generally, where aggressions against non-European territories had been checked by the growth of Turkish power, the Spanish and the English could still pursue the conquest of lands and peoples against the Spanish Arabs of Granada and the Celts of Ireland. Thus, the two major land-conquering and colonizing powers, Spain and England, preceded their respective transatlantic conquests by the conquest of neighboring peoples—the Moors of Granada by Spain in the late fifteenth century, and the Irish by the English, particularly during the sixteenth century. In these aggressions both the Spanish and the English not only acquired the skills and appetites for further violence, but also established the attitudes and policies to be applied to alien peoples through conquest, extermination, or enslavement.

Due to geographical and political conditions, Spain retained the military spirit of feudalism for a longer time than other European countries. The arid climate and the frontier wars with the Muslims caused the Spanish ruling class to remain essentially horsemen, who in place of agriculture emphasized sheep and cattle farming, occupations in which horsemen could be utilized and trained for war. This style of life had a profound influence on Spanish colonization. The Christian and Muslim farmers conquered by the Spanish nobles were kept in feudal serfdom to provide foodstuffs for the ruling class, to whom their villages had been granted. This feudal system, which had been imposed on the conquered lands of Granada and the Canary Islands, was then applied to the larger islands of the West Indies and later to Mexico, Venezuela, and Peru. The native villages were granted to Spanish conquistadores, who were to govern them so as to live upon the work of the natives. The hapless natives were compelled to provide food, cotton, and forced labor for building the great cities where the Spanish lived and from which they governed, and to work for large mining operations of the Spaniards. Alongside the agriculture of the Indians, the conquistadores developed the raising of sheep, cattle, horses, and mules to provide profits for themselves as well as work and plentiful meat for their keepers. Generally the Spanish colonists did not pursue productive work; instead they entered government and privileged occupations, in which to live from the work of the natives whom they enslaved.

The right to conquer, coercively convert, govern, and enslave the natives of the New World was subjected to intense criticism in a series of lectures in 1539 at the University of Salamanca by the great Dominican scholastic philosopher Francisco de Vitoria. In international law based
upon the natural law, insisted Vitoria, the native peoples as well as European peoples have full equality of rights. No right of conquest by Europeans could result from crimes or errors of the natives, whether they be tyranny, murder, religious differences, or rejection of Christianity. Having grave doubts of the right of the Spaniards to any government of the natives, Vitoria advocated peaceful trade, in justice and in practice, as against conquest, enslavement, and political power, whether or not the last mentioned were aimed at individual profit, tax revenue, or conversion to Christianity. Although the Spanish government prohibited further discussion of these questions, the Vitoria lectures influenced the New Laws of 1542, which gave greater legal protection to the natives in America.

Nevertheless, there were defenders of imperialism in Spain who rejected international law and scholastic individualism and returned to the slave theories of the classical authors. Based on the theory of natural servitude—that the majority of mankind is inferior and must be subdued to government by the ruling class, of course in the interest of that majority—these imperial apologists proposed that the natives be taught better morals, be converted, and be introduced to the blessings of economic development by being divided among the conquistadores, for whom they must labor.

The serfdom of the Indians was most strongly and zealously opposed by the Dominican missionary Bishop Bartolome de Las Casas. Tireless in working to influence European public opinion against the practices of Spanish officials in America, Las Casas argued that all men must have freedom so that reason, which naturally inclines men to live together in peace, justice, and cooperation, can remain free and unhampered. Therefore, concluded Las Casas, even pursuit of the great objective of conversion to Christianity cannot be used to violate these rights. Not only was all slavery evil, but the natives had a right to live independently of European government. The papacy, in 1537, condemned as heretical the concept that natives were not rational men or were naturally inferior persons. These progressive views were also reflected in the abolition of conquistador feudalism in the New Laws of 1542; however, this abolition was revoked by the Spanish Crown three years later.

Political control of the Spanish colonies was first exercised by a committee of the Council of Castile, and then from 1524 by the Council of the Indies. In the New World, provincial governments were created, with the two most important, Mexico and Peru, raised to status of viceroyalties. Economic control of the colonies was vested in the Casa de Contratacion, instituted in 1503 to license, supervise, and tax merchants, goods, and ships engaged in trade in the New World. In 1508 a Bureau of Pilots was established under the Casa which advised the Government on maritime matters and supervised navigation and navigators; its first chief pilot was Amerigo Vespucci. Sebastian Cabot held that office for
about thirty years, after transferring from English to Spanish service, as England’s maritime interests had shifted from exploration to the development of a governmental navy.

The shift of English interests from exploration to naval construction was reflected in 1510, when the English government began to build a shipyard for making vessels for a navy. In 1512 the controller of the navy organized an association of pilots that would provide experienced navigators for the navy in return for privileges in control of English shipping, privileges similar to those granted to the Spanish Bureau of Pilots. With the controller of the navy as its first master, that association was chartered as “the master, wardens and assistants of the guild of the Trinity.” The Trinity House Corporation advised the government on maritime affairs and controlled navigation and seamen.

Just as Spain had made Seville the staple port to and from which all colonial commerce was compulsorily channeled, so Bristol was made the staple port for monopolizing English commerce with the New World. Bristol’s experience in colonial trade had begun with the grant of Dublin as a colony to the merchants of Bristol when England initiated its occupation of Ireland; that experience was enlarged when Bristol’s oceanic trade to the Iberian countries was extended during the fifteenth century to the sugar colonies of Madeira and the Canaries.

By artifically depressing the price of wool in England and raising it abroad from the mid-fourteenth century on, the Merchant Staplers not only had greatly injured the growth and export of English wool but had also unintentionally spurred the establishment of wool and textile manufacturers in England. For woolen manufacturers could now buy wool at significantly lower prices than could their competitors abroad. This rising cloth industry was organized in country districts and villages, where it could be free of the restrictions and the excessively high prices and wage rates imposed by the privileged monopolies of the urban guilds. Furthermore, the merchants of Bristol were now able to bring to England the finer Spanish wool that formed the raw material for the developing manufacture of “new drapery,” a lighter and less expensive cloth than that woven from the heavier English wool. Since the technique of manufacture of the new drapery was new, it did not come under the controls and monopolies of the urban guilds, which manufactured the traditional heavy cloth. The period of peace from the mid-fifteenth century on witnessed a rapid increase in population, but the rigid cartel restrictions of the urban guilds condemned large numbers to unemployment. Hence the expansion to the countryside of both the new-drapery and the traditional heavycloth industries of England. Unburdened of guild regulations on production, prices, and labor, the new rural woolen cloth industry was sufficiently elastic to respond to the demands of large-scale export markets for cheap plain cloth, by developing a large-scale organization of production forbidden by the guilds.

From the middle of the fifteenth century, indeed, there had begun to occur a great transformation of the entire economy of Western Europe. Stagnation and depression proceeded to give way to economic progress, as the state-ridden system of protection and regulation broke apart, and capital was accumulated and invested outside the controls that had encompassed the economy. In the Netherlands, in particular, a development occurred similar to England’s: the rapid emergence of a rural cloth industry, free of urban guild and municipal regulations and taxation. Furthermore, the controls and high taxation of commerce in Bruges drove trade to Antwerp, where, free of hampering legislation, privileges, and taxes, business was able to organize itself on the basis of a new spirit of capitalist progress and economic growth. For a century, Antwerp now became the commercial capital of Europe, drawing by its freedom not only the traditional trades of English wool and cloth, Baltic grain and timber, and luxury goods of the Mediterranean, but also the growing trade in spices and sugars of the Indies—East and West. Antwerp became the main center of importation not only of English wool, but also of English woolen cloth; for woven cloth would be sent to Antwerp for dyeing and finishing. As Henri Pirenne has noted: “Never has any other port, at any period, enjoyed such worldwide importance, because none has ever been so open to all commerce, and, in the full sense of the word, so cosmopolitan. Antwerp remained faithful to the liberty which had made her fairs so successful in the fifteenth century. She attracted and welcomed capitalists from all parts of Europe, and as their numbers increased so did their opportunities of making a fortune.... There was no supervision, no control: foreigners did business with other foreigners freely as with the burgesses and natives of the country at their daily meetings. Buyers and sellers sought one another and came to terms without intermediaries.”
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The rise of Antwerp as the great center of European commerce was complemented by the growth of the Dutch merchant marine; for the free-trading Dutch were the major carriers of goods to and from the unrestricted and progressive port of Antwerp, and were as motivated by the spirit of liberty and capitalism as was Antwerp. During the fifteenth century, the herring, upon which the Hanseatic trade had been founded, migrated from the Baltic to the North Sea and became a cornerstone of Dutch commercial development. Holland and Zeeland became the major herring fisheries of Europe; they improved the techniques of curing the herring and transporting it to all the ports of Europe, while simultaneously refining the methods of shipbuilding and fishing. Hence the Dutch were able to compete successfully with the Hanseatic traders in the Baltic, the North Sea, and the Atlantic, to Bordeaux and Lisbon.

Too many historians have fallen under the spell of the interpretation of the late nineteenth-century German economic historians (for example, Schmoller, Bucher, Ehrenberg): that the development of a strong centralized
nation-state was requisite to the development of capitalism in the early modern period. Not only is this thesis refuted by the flourishing of commercial capitalism in the Middle Ages in the local and noncentralized cities of northern Italy, the Hanseatic League, and the fairs of Champagne—not to mention the disastrous economic retrogression imposed by the burgeoning statism of the fourteenth century. It is also refuted by the outstanding growth of capitalist economy in free, localized Antwerp and Holland in the sixteenth and seventeenth centuries. Thus the Dutch came to outstrip the rest of Europe while retaining medieval local autonomy and eschewing state-building, mercantilism, government participation in enterprise—and aggressive war.
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Despite the rise of rival Dutch shipping, the continued importance of the Hanseatic League in the economic life of England was indicated by the Treaty of Utrecht (1474), which confirmed the trading privileges of the Hansards in England, including the payment of lower duties than the English merchants paid. But the accession of the Tudor dynasty to the English throne in 1485 marked the beginning of a steady growth of the power of the English government. Medieval forms were transformed by the Tudors into a more efficient and complete machinery for repression, especially in regulating those economic activities that had achieved prosperity by freely evading the government’s regulations, controls, and taxation. Monopoly rights were granted in 1486 to the Fellowship of the Merchant Adventurers of England in all trade to the Netherlands except in wool; especially important was the export of cloth to the finishing and dyeing centers of the Netherlands. Furthermore, navigation acts restricted to English ships the importations of wines, in the vain expectation of thus increasing the number of English sailors and ships sufficiently to develop a strong governmental naval force. In 1496 the English government negotiated with the government of the Netherlands the Great Commercial Treaty (Intercursus Magnus), which provided favorable commercial conditions for English merchants at Antwerp. The important contribution of the Intercursus Magnus to international law was to recognize the freedom of English and Dutch fishermen on the high seas, especially on the North Sea, which had become the major European fishing area. The fishermen were to be free to fish anywhere and to use the ports of either country in an emergency. For a century and a half, the Intercursus Magnus remained the foundation of Anglo-Dutch commercial and maritime relations. However, by an act of 1497 the English government implemented its treaty power to monopolize and control trade to other countries; specifically, the act excluded English competitors of the Merchant Adventurers from the Netherlands trade by granting that company a monopoly in the trade with Antwerp. The cloth trade to the Netherlands now became the privileged monopoly of a limited number of
London merchants, who came more and more to have the closest fiscal relationships with the state through loans at favorable terms to the government.

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